How Hedge Funds Found a New Tax Loophole: DealBook Briefing

And elsewhere in hedge funds: Yesterday was 13F day: Here’s what the big firms invested in.

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Andrew White for The New York Times

Politics prompts a Silicon Valley legend to split

Why is Peter Thiel — the PayPal co-founder, early Facebook backer and notable Trump backer — leaving the Bay Area for Los Angeles, as the WSJ reports, citing unnamed sources?

The headline reason is his belief that Silicon Valley is too intolerant of conservatives and libertarians. But there’s an interesting second reason in the article (emphasis added):

Mr. Thiel has grown more disaffected by what he sees as the intolerant, left-leaning politics of the San Francisco Bay Area, and increasingly pessimistic about the prospects for tech businesses amid greater risk of regulation, they said.

The WSJ reports that Mr. Thiel will spend at least a bit more time working on a non-tech endeavor: a right-leaning media organization. He will still be involved in Founders Fund, the V.C. firm he co-founded, as well as stay on the boards of Facebook, the data consultancy Palantir and other tech companies.

— Michael de la Merced

Can 100 years old become the new 60? That’s the goal of Celularity.

The New Jersey-based start-up co-founded by Dr. Peter Diamandis, the founder of X-Prize Foundation, and Dr. Bob Hariri, a former Celgene executive, announced that it has raised $250 million.

The company is developing treatments for diseases from cancer to autoimmune disorders using stem cells from the placenta.

“My goal is to make it so the next generation grows up in a world where cancer is managed just like the common cold, and the body’s natural regenerative engine remains empowered throughout our lives,” said Dr. Hariri.

Celgene, United Therapeutics, Sorrento Therapeutics, Human Longevity, the Dreyfus Family Office and Section 32 took part in the series-A funding.

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Richard Drew/Associated Press

Stocks investors shrug off inflation, but bond investors don’t

Asian and European stock indexes are up this morning. So are S. & P. 500 futures, indicating a strong open.

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And in the bond markets? Ten-year Treasury yields are at a four-year high.

Why? The Bureau of Labor Statistics’ inflation report was higher than expected. But weaker retail sales tempered those fears — at least for equity investors.

What economists think: “The risk is now that the Federal Reserve pencils in four rate hikes [for this year] when it meets in March,” Peter Hooper, the chief economist at Deutsche Bank, told the FT.

Peter Eavis’s take

To some, the bond market is a particularly prescient predictor of economic trends. So is it picking up on an inflationary surge that the Federal Reserve likely will take too long to recognize?

But the overheating fears may be overdone. Yesterday’s January inflation report was hardly conclusive. Michael Feroli, an economist at JPMorgan Chase, said that the January increase “probably overstates the underlying trend.”

Still, even though there are reasons to believe that while the U.S. economy is breaking out of its recent rut — thanks to big tax cuts and a revival of the global economy — it may not be as vibrant as it looks.

Nestlé opens a path to selling its L’Oréal stake

If Nestlé won’t expand its holdings in the cosmetics giant beyond 23 percent, as its C.E.O. said during an earnings report today, that leaves one logical place to go. (Caveat: Selling might make Third Point’s Dan Loeb happy, but Nestlé doesn’t want to rush and lose out on L’Oréal’s sales growth.)

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Nestlé added that its future is likely to contain more deals in the several-hundred-million range of the Blue Bottle Coffee takeover. “The sweet spot is in small to mid-sized deals, but we don’t want to rule out anything,” its C.E.O., Mark Schneider, said.

• Fannie Mae is seeking $3.7 billion from the Treasury Department after reporting a $6.5 billion loss for the fourth quarter. (WSJ)

• The E.P.A.’s chief, Scott Pruitt, said he had traveled in first class and on military jets for security reasons. And read about a loophole in emissions regulations for trucks favored by backers of the Trump administration.

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Mike Cohen for The New York Times

Uber’s C.E.O. sounds off on SoftBank and more

Here’s what Dara Khosrowshahi said of the company’s deep-pocketed new backer yesterday at Goldman Sachs’s annual tech conference: “Rather than having their capital cannon facing me, I’d rather have their capital cannon behind me, all right?”

He added that SoftBank’s Masa Son “is a visionary — if a visionary wants to make a bet on you, let’s make it happen.”

He also offered this ambition: “I want you to be able to take an Uber and get into the subway — if the trains are running on time, you’ve got real-time data — get in the subway, get out and have an Uber waiting for you for right now. Or know that there’s a bike right there for you that gets you where you’re going in the fastest manner.”

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Loic Venance/Agence France-Presse — Getty Images

The tech flyaround

• Amazon will work with Bank of America on small-business lending, unnamed sources say. Its Washington lobbying operation has become formidable. And it’s planning 2,000 new hires in France.

• Google’s Chrome browser will block some online ads. Critics say the choice of which types to block is self-serving. (WSJ)

• Snapchat said it would let creators of “Official Stories” see analytics about the performance of their work. (Axios)

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Dado Ruvic/Reuters

Do we need a new crypto-cop?

In the latest White Collar Watch column, Peter Henning considers the potential benefits of a separate regulator for virtual currencies:

Whether the S.E.C. or the C.F.T.C. are the best venues for this type of regulation is something Congress will have to decide. Neither agency has experience in overseeing virtual currencies, so assigning responsibility to one (or both) will require increased appropriations to develop rules and effective oversight.

• Citigroup has won its first local mandate in Saudi Arabia since returning to the kingdom, advising a budget airline owned by Kingdom Holding on its I.P.O. (Bloomberg)

• One of India’s largest commercial lenders said it had detected fraudulent transactions worth $1.77 billion at just one of its branches, raising fears of a potential ripple effect across Indian banking. (NYT)